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Essay Available:
Pages:
2 pages/β‰ˆ550 words
Sources:
2 Sources
Style:
APA
Subject:
Accounting, Finance, SPSS
Type:
Case Study
Language:
English (U.S.)
Document:
MS Word
Date:
Total cost:
$ 9.36
Topic:

The Difference Between Portfolio Risk and Stand-Alone Risk

Case Study Instructions:

Instructions
Diversified Risk Stock Portfolio
For this case study, you will create a portfolio of five to eight stocks that demonstrate diversified risk. List the stocks along with their current price and previous 1-year and 5-year rates of return. Below the list of stocks, address the issues described below.
Explain the difference between portfolio risk and stand-alone risk.
Briefly explain why you selected each stock and how this investment portfolio would have less risk than selecting just one stock.
How does risk aversion affect a stock’s required rate of return?
Explain the distinction between a stock’s price and its intrinsic value.
Your case study should be at least two pages in length, not counting the title and reference pages. You are required to cite and reference and stock data source. Use APA format to cite in-text and reference citations.

Case Study Sample Content Preview:

Diversified Risk Stock Portfolio
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Diversified Risk Stock Portfolio
Stock Info

AT&T

Verizon

Apple

Walmart

Amazon

Current Prices

$29.81

$55.65

$121.03

$134.05

$3089.49

Rate of return in 1 year

7.98%

5.98%

13.66%

18.95%

18.70%

Rate of return in 5 years

11.69%

8.50%

26.70%

20.20%

4.22%

The Difference Between Portfolio Risk and Stand-Alone Risk
Many multinational organizations countercheck the associated financial risks and portfolios when evaluating their investment levels. Companies with a diversified portfolio typically combine this with assets. A diversified portfolio refers to an assortment of various investments that a company or an entrepreneur combines to reduce their overall risk (Brigham & Ehrhardt, 2016). Diversification entails stock ownership from different profile risks, countries, industries, and investments such as real estate, commodities, and bonds. I chose to illustrate this using AT&T, Verizon, Apple, Walmart, and Amazon because they are among the most prominent and the world's leading multinational companies today.
The historical success of AT&T, Verizon, Apple, Walmart, and Amazon, especially on sustainable growth, is in the public domain. Many businesses and investors try to protect their property by minimizing the risk of losses by seeking a return on their investment through diversification. This process, which involves minimizing the risk of loss, is called portfolio risk (Lhabitant, 2017). On the contrary, a standalone risk denotes a risk generated through a specific project, division, or asset. A standalone risk measures the degree of damage characterized by a sin...
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